Fundamentals for the New Insurance Office Proprietor

Once you have made the choice to work for yourself, review the expertise you possess and the resources that are already available to you. Let's say you have a good sales record and you have connections with other business professionals but have not worked in the insurance business. Next—Will you be an independent agent or work for an established national insurance firm such as Farmers or Allstate? If you choose to go into business with a national insurance office, you will discover that they have their own training strategy and will help you secure your license and get the education you need. If you make the decision to be an independent agent, you have some hard work ahead of you; however, you are making an exciting investment that will pay off later.

As an independent agent, you must obtain your license. Call your home state's department of insurance to learn the requirements for becoming an insurance agent. Each state manages the insurance market and its agents in order to provide consumer protection and to set up a non-biased and efficient way for insurance professionals to compete. They also have routines for investigating and regulating agents and investors in order to defend against fraudulent practices.

Now you are ready to seek the education and training appropriate to obtain your license. Some educational resources accessible online include Kaplan University, AdBanker and WebCE. These organizations offer professional and continuing education curriculum to help prepare one for licensing exams and to abide by the state requirements for license renewals. A word of caution: if you decide on online classes, make certain that the seminars meet the requirements in your state. Note that most states call for some sort of instruction in ethics and some particular area such as flood insurance.  Check with the department of insurance to find out what these requirements are in your state. Be aware that once you have acquired your license you must meet continuing education requirements in order to renew your license each term.

While checking out the state qualifications, you should decide what type of insurance you want to offer. The kinds of insurance are personal lines, property and casualty, and life insurance. Personal lines are the most common and include non-commercial products such as auto and homeowners insurance. Property and casualty lines cover advanced personal and commercial insurance like professional liability and commercial auto insurance. Life insurance is a good product to add to your lines because typically this classification of insurance offers the best commission.

Let's proceed to the business side of opening your venture. For small business owners, it is wise to consider forming a limited liability company (LLC) or corporation in order to protect yourself from personal liability claims. Talk about this question with your counsel and/or accountant. They will be able to direct you on this question and aid you in obtaining a business license. By establishing a legal business entity, you can protect your personal assets and make your venture more credible.

Next, acquire protection for your organization. You must get a surety bond. A surety bond is similar to insurance in that it pays the purchaser if a contractual service or agreement has not been satisfied as agreed. You will also have to buy errors and omission (E&O) insurance. Most insurance companies that you work with will request you to have an E&O policy in effect.

Get ready to secure funds for starting your business. Engage in conversation with your attorney, accountant, public relations professionals and business experts as support in evaluating your needs and for assistance in finalizing a focused business plan. The Small Business Administration in your region can offer helpful assistance on what you need to do to secure capital for your new business. If you are requesting financing, be prepared to give in-depth details about your start-up expenses. The banking industry will examine your goals and assure you have a sensible business plan before they acquire the risk involved in making a loan to you. Another advantageous resource to contemplate is your professional associates or friends who may be thrilled to invest in your business.

Now that you are a licensed insurance agent, start making those calls to get certified by insurance underwriting companies. You’ll have to approach the insurance carriers and sell yourself. Notice that you should be prepared to share your business blueprint and plans for growth so that they can decide if you are worth the exposure or investment. It is helpful if you have an inside acquaintance who can help you with the appointment process. This effort will probably be the most difficult blockade you have confronted so far. If you have difficulty getting assigned by these companies, initially you may want to use a surplus lines broker or managing general agent (MGA) such as Insurance Noodle or Smart Choice. Usually, these MGA firms charge a membership fee and take a cut of your commission for furnishing access to insurance companies that quote and underwrite your policies. Another avenue for a start-up agency is to be a member of a cluster, alliance or network group such as ISU Network which uses the privilege of the group to gain appointments. Even though those fees increase operating costs, it gives you versatility in the lines you can offer and provides you an opportunity to increase clientele and know-how.

Ascertain your target market and prepare to sell. If you have previously worked as an agent for a captive or national insurance company, give consideration to any non-compete agreements with those companies before you try to sell to your former clients. If this agreement exists, discuss the stipulations with your counsel so that you do not disobey any state laws. If you are just starting out as an agent, observe that picking the appropriate agency name can be a deliberate piece of your business blueprint. Using your name in the agency name improves recognition and aids clients in locating you more easily. Make sure to examine the local advertising channels such as the yellow pages, your local newspaper or chamber of commerce depending on your target audience.

Creating a website should be a primary part of your advertising policy. Have it up and running from day one. And do not overlook the chance to boost your business via social networking sites like Facebook. By adopting these resources you can notify people about your new company and easily gain referrals and build your client base at the same time. Be sure to keep these posts personal with a random marketing blurb-you don't want to be tagged as a spammer.

As you check out your office management essentials, you need to analyze your plan for retaining records and being familiar with information that can affect your market. Numerous insurance companies obtain various software systems such as insurance rating systems and customer relation software in order to be more productive. You should place emphasis on acquiring an agency management software system like Forms Boss to assist in keeping suitable and responsible transactions on your clients and their policies. A proficient agency management system should efficiently manage your customer database and save you time and money.

As you familiarize yourself with the peculiarities of the insurance industry, you will learn about ACORD, a global non-profit organization that develops standards and systems that benefit the insurance and related financial industry in the collection of information. They have developed consistent forms, known as ACORD forms, to automate the compilation of data. In order to meet legal and standardized requirements you will need access to ACORD forms. A thorough survey of ACORD licensed software systems will allow you to make the best choice for your office. One of the most popular systems is Forms Boss which is simple to use and easy to learn. Their software system automates the process of maintaining your customer database and accesses fillable ACORD forms which contributes to a reduction in data entry assignments and helps in record-keeping accuracy.

Opening an insurance organization is no small task. If you are prepared to roll up your sleeves and get to work, with some tenacity and lots of diligence you will be proud of the investment you have made and the strong business you have grown.